The Auditor Must Verify Whether the Physical Counts Were Correctly

question 72

Multiple Choice

The auditor must verify whether the physical counts were correctly summarized,the inventory quantities and prices were correctly extended,and the extended inventory was correctly footed.These tests are called

• A)price tests.
• B)compilation tests.
• C)cost tests.
• D)mechanical tests.

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Definitions:

Conversion Costs

The expenses incurred in the process of converting raw materials into finished products, typically including labor and overhead costs.

Equivalent Units

A concept in process costing that converts partially completed units into a smaller number of fully completed units based on the percentage of completion.

Beginning Work in Process Inventory

The value of partially finished goods at the start of an accounting period.

Assembly Department

A section within a manufacturing facility where components are assembled into finished goods.